Northwestern Energy Group, Inc. · NASDAQ:NWE
Northwestern Energy — Q1 2019 Earnings Presentation
25 slides from Northwestern Energy's earnings presentation, Apr 24, 2019
Slide 1: 2019 First Quarter Earnings Webcast
Two Dot Wind Farm – Montana 2019 First Quarter Earnings Webcast April 24, 2019
Slide 2: Presenting Today / Forward Looking Statements
Presenting Today Forward Looking Statements During the course of this presentation, there will be forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Bob Rowe, Litigation Reform Act of 1995. Forward-looking statements often address our expected fut
Slide 3: Recent Highlights
Recent Highlights • Net income for the first quarter of 2019 increased $14.3 million, or 24.4%, as compared to the same period in 2018. This increase was primarily due to higher gross margin as a result of colder winter weather and customer growth and a reduction in revenue in 2018 due to impacts of
Slide 4: Summary Financial Results
Summary Financial Results (First Quarter) (1) 4 (1) Gross Margin, defined as revenues less cost of sales, is a non-GAAP Measure See appendix for additional disclosure.
Slide 5: Gross Margin
Gross Margin (First Quarter) (dollars in millions) Three Months Ended March 31, 2019 2018 Variance Electric $ 196.0 $ 181.0 $ 15.0 8.3% Natural Gas 72.5 64.4 8.1 12.6% Total Gross Margin (1) $ 268.5 $ 245.4 $ 23.1 9.4% Increase in gross margin due to the following factors: $ 7.9 Natural gas retail v
Slide 6: Weather
Weather (First Quarter) Extremely cold February and March contributed approximately $14.0M pretax gross margin benefit as compared to normal and $9.2M pretax benefit as compared to first quarter 2018. 6
Slide 7: Operating Expenses
Operating Expenses (First Quarter) (dollars in millions) Three Months Ended March 31, 2019 2017 Variance Operating, general & admin. $ 81.1 $ 74.3 $ 6.8 9.2% Property and other taxes 44.8 42.8 2.0 4.7% Depreciation and depletion 45.6 43.8 1.8 4.1% Operating Expenses $ 171.5 $ 160.9 $ 10.6 6.6% Incre
Slide 8: Operating to Net Income
Operating to Net Income (First Quarter) (dollars in millions) Three Months Ended March 31, 2019 2018 Variance Operating Income $ 97.0 $ 84.5 $ 12.5 14.8% Interest Expense (23.8) (23.0) (0.8) (3.5%) Other Income / (Expense) 1.1 (1.1) 2.2 200.0% Income Before Taxes 74.4 60.4 14.0 23.2% Income Tax Expe
Slide 9: Income Tax Reconciliation
Income Tax Reconciliation (First Quarter) 9
Slide 10: Balance Sheet
Balance Sheet Improvement in debt to capitalization ratio; which is now closer to bottom end of 50%-55% targeted range. Debt to Total Capitalization was 52.0% at March 31, 2018 10
Slide 11: Cash Flow
Cash Flow Cash from operating activities decreased by $61.6 million primarily due to an increase in market purchases of supply resulting in an under collection of supply costs from customers in the current period, credits to Montana customers during the current period related to TCJA, and the receip
Slide 12: Adjusted Non-GAAP Earnings
Adjusted Non-GAAP Earnings (First Quarter) The adjusted non- GAAP measures presented in the table above are being shown to reflect significant items that were not contemplated in our original guidance, however they should not be considered a substitute for financial results and measures determined o
Slide 13: Looking Forward
Looking Forward Regulatory • MPSC to review Montana general electric rate review, $3.30-$3.50 filed in September 2018. $3.30-$3.45 $3.10 - $3.30 $2.60$3.20-$3.40 - $2.75 • We expect to file an associated FERC rate case for our Montana transmission assets in the second quarter 2019. Continue to Inves
Slide 14: Montana Electric Rate Case
Montana Electric Rate Case Background • First general electric rate case in Montana since 2009. The filing also requests: • While we have efficiently managed operating and administrative costs, • Approval to capitalize Demand increased Montana property taxes and significant investment in the Side Ma
Slide 15: Relevant Legislation
Relevant Legislation There are several potentially significant bills currently being considered by the Montana Legislature. In addition to many other less substantive bills, we are monitoring potential impacts of the following: • Legislation that would allow us to acquire up to an additional 150 MW
Slide 16: NWE Energy Supply Resource Plans
NWE Energy Supply Resource Plans South Dakota Electricity Supply Resource Plan Ryan Dam Upgrade • Published fall of 2018, the plan focuses on modernization of our fleet to improve reliability and flexibility, maintain compliance in Southwest Power Pool, and lowering operating costs. The plan identif
Slide 17: Capital Investment Forecast
Capital Investment Forecast $1.6 billion of total capital investment over five years. Increased investment in first three years (relative to last two years) is primarily a result of advanced metering infrastructure (AMI) project. We anticipate funding the expenditures with a combination of cash flow
Slide 18: Conclusion
Conclusion Best Attractive Pure Strong Solid Utility Practices Future Electric & Earnings & Foundation Corporate Growth Gas Utility Cash Flows Governance Prospects 18
Slide 19: Appendix
Cr Appendix 19
Slide 20: Montana Electric Tracker Update
Montana Electric Tracker Update The MPSC issued a final order in January 2019 approving a Power Cost & Credit Adjustment Mechanism (PCCAM) with the following provisions: • A baseline of power supply costs; • Symmetrical deadband of +/- $4.1 million from the established baseline. Supply cost variance
Slide 21: Appendix Segment Results
Appendix Segment Results (First Quarter) (1) (1) (1) Gross Margin, defined as revenues less cost of sales, is a non-GAAP Measure. See appendix for additional disclosure. 21
Slide 22: Appendix Electric Segment
Appendix Electric Segment (First Quarter) (1) (1) Gross Margin, defined as revenues less cost of sales, is a non-GAAP Measure. 22 See appendix for additional disclosure.
Slide 23: Appendix Natural Gas Segment
Appendix Natural Gas Segment (First Quarter) (1) (1) Gross Margin, defined as revenues less cost of sales, is a non-GAAP Measure. 23 See appendix for additional disclosure.
Slide 24: Appendix Non-GAAP Financial Measures
Appendix Non-GAAP Financial Measures These materials include financial information prepared in accordance with GAAP, as well as other financial measures, such as Gross Margin and Adjusted Diluted EPS, that are considered “non-GAAP financial measures.” Generally, a non-GAAP financial measure is a num
Slide 25: NorthWestern Energy - Delivering a bright future
Upetivering a bright future NorthWestern Energy
NorthWestern Energy Group — Q1 2019 Earnings Presentation on 6ix